I-T Dept unearths 400 Benami deals, attaches properties
The Income Tax Department stated that it had unearthed 400 benami deals and has attached Rs. 600 crore worth of properties in regards to the deals. Sources said that so far, the properties attached are only in connection with 240 cases, while 160 cases are still being probed. In 40 cases, immovable property of a cumulative value of Rs. 530 crore have been attached.
What are Benami properties?
'Benami' properties or assets are those which are not held in the name of the person who paid for it: usually such assets are held under the name of family members, business associates, employees, friends etc. Separately, the person who holds the asset is unable to establish an income trail for purchase of such asset/property. The Benami Transactions (Prohibition) Act was passed in 1988.
Benami legal framework
The 1988 Benami act although passed was never implemented or notified as rules were never prescribed by the government. In 2011, a 'Benami Transactions (Prohibition) Bill 2011' was introduced by UPA government but was never passed. In July 2016, the BJP government amended the 1988 Benami Act and subsequently 'Benami Transactions (Prohibition) Amendment Act, 2016 (Benami Act) came into effect on November 1, 2016.
What is the Benami Transactions act?
The Benami Transactions Amendment Act came into effect in Nov'16. Benami property includes movable, immovable, tangible, intangible, corporeal and incorporeal property. Under the act, the beneficial owner, the benamidar, the abettor and facilitator of the transactions can be sent to prison for 7 years.
Some details of the cases
I-T department sources said that the benami deals were unearthed in Kolkata, Mumbai, Delhi, Gujarat, Rajasthan and Madhya Pradesh. The transactions include deposits in bank accounts, plots of land, flats or jewellery. In several cases, employers had registered properties in the name of their employees. Some were also found to have purchased properties through shell companies.
Significance of Benami Act
Experts believe, Benami Act is a huge step in the right direction to tackle black money. Data shows only 6% of black money is in cash whereas the rest is invested in real estate, gold and other assets. The Benami Act prohibits benami transactions and violations are punishable with imprisonment. Benami properties are also liable to be confiscated by the government without any compensation.
